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Why you need to know your Net Promoter Score

by David Voorn
27 February 2017
Why you need to know your Net Promoter ScoreUse real-time customer feedback to improve your business's NPS and create true brand loyalists.

When a Tesla owner took to Twitter to complain that his local charging station was usually full of charged cars whose owners treated the station like a carpark, Tesla CEO Elon Musk paid attention.

In less than a week, Tesla policy had changed to make owners pay extra for every minute fully charged cars spent taking up valuable space at the Supercharger. It would be fair to guess that, after an experience like that, the customer who made the complaint is now firmly in Tesla's 'advocate' camp.

As any business knows, turning buyers into advocates is an important step for long-term success. Not only are repeat customers more likely to buy from you, they can also spread the word.

Brand loyalty is largely won or lost based on customer experience – and many Australian brands simply aren’t delivering the kind of service that could convert their one-time buyers into brand loyalists.

According to the latest Australian Digital Experience report, people who indicated they had a positive customer experience were five times more likely to stay loyal to the brand. So, what does a business need to know about customer experience, and how can they turn the tables on buyer dissatisfaction?

Understanding customer experience: Net Promoter Score (NPS)

While social media has amplified the voice of the customer, it usually only brings to light the most polarised experiences. You may be aware of the highest praise and the worst complaints of your customers, but what can you say about your average customer experience? Surveys are often overlooked as a way of capturing customer sentiment and identifying what you’re doing right or wrong.

Enter: The Net Promoter Score (NPS).

The primary purpose of NPS is to measure customer loyalty and, to a lesser degree, project revenue.

Your NPS is calculated by creating a single-question customer survey. Your customers are asked to rate on a scale from zero to 10: 'How likely is it that you would recommend [brand] to a friend or family member?

Respondents fall into three categories: Promoters, those who rate 9–10; Passives, those who rate 7–8; and Detractors, those who rate 0–6. The NPS is created by subtracting the total percentage of Detractors from the total percentage of Promoters. Scores range from -100 to 100, with more than 0 being good and more than 50 points being excellent.

After the example of Tesla's flexibility and commitment to customer experience described above, what do you think Tesla's NPS is?

At last count, a staggeringly high 97.

To get a better understanding of your customers’ preference, prompt them with additional questions to allow them to explain their score.

This can include questions such as:

  • How satisfied are you with [brand]?
  • Do you intend to return to [brand] within 30 days?
  • Why?

What does a low NPS actually mean?

There can be many reasons for a low NPS, but let’s consider some of the most common complaints and how NPS can help you understand where you’ve gone wrong.

1. Poor customer service

Consider following up every customer interaction with an NPS satisfaction survey. These could be sent after a support call, an in-store visit or an online purchase. NPS will flag your detractors and help to identify customer’s pain points. Fuse this with other behavioural analytics to determine a measurement for your overall customer satisfaction.

The advantage of real-time feedback is that you have a time-stamp of your customers' less than satisfactory service. With this data in hand, take the opportunity to immediately contact high value, at risk customers who rate your business poorly. Let your customers know that your company takes complaints seriously and that you would like to regain their loyalty.

2. Leaving for a competitor 

While most businesses are conscious of their competitors, very few see their business through the eyes of their customers. Open-ended questions or comments in an NPS survey allow your customers to tell you exactly what they think. This can draw your attention to a pricing difference or a new product in the marketplace that you were unaware was in competition with your own.

3. Aggressive selling or marketing tactics

Similarly, open-ended questions will help to identify if a customer believes the business is disingenuous or too overt in their sales approach. Customers like to feel in control of their purchases. If a business oversteps boundaries, a customer may respond negatively.

This could include:

  • Creating an automatic billing process without adequate warning
  • Billing after a trial (also without proper warning) Consistently try to up-sell

How can you use your NPS?

Your NPS result is quite literally the unfiltered voice of your customer, and can provide sobering insights into your business’s overall health. Assuming you score highly with your NPS, you’ll know that the experience you are providing your customers is appreciated.

But let’s assume you’ve received an NPS which has a margin for improvement.

Quality data from the qualitative questions you ask in addition to the survey will help you unpack your NPS result and allow your business to leverage tools like VOC. This technology will help you process your data, and better understand your customers. With VOC, you’ll be able to better understand just why your customers are unhappy.

Find out more about how you can use VOC to get to know your customers and grow brand loyalty. Contact us today on 1300 725 628 or get a quote.

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About the author
David Voorn
Production Manager – Customer Experience

David has over 15 years’ experience in digital media production and management. During this time he has been involved in digital marketing, social media, e-CRM, email marketing, content management, web design and audio production for websites, film, television and emerging media platforms. David lead the transformation and optimisation of NRMA’s digital marketing program consisting of a series of highly targeted digital publications including; Travel, Motoring, Youth, Online retail, Community, Franchise and B2B.

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